With Reuters reporting Suntech provided 9% of OCI's 2012 revenues, the announcement by the Seoul-based poly manufacturer of the cancellation of three large supply contracts to Suntech saw OCI's share price dive almost 10% to a six-year low at the start of yesterday's trading before recovering to close 2% down.
OCI announced the termination of two contracts to Suntech's main Wuxi Suntech manufacturing unit which entered insolvency in March and the cancellation of a third contract to Suntech's European subsidiary after Swiss authorities granted a two-month moratorium to allow the business to restructure debts.
The Wuxi contracts, dating from March and August 2008, are for agreements to supply US$631.5 million and $751.6 million of polysilicon of which $419.4 million and $558.7 million of payments were outstanding, respectively.
The 2011 European contract to supply Suntech Power International with $429 million has an outstanding balance of $390.1 million.
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